Geddes traded in equipment with a book value of 2000

Reference no: EM13600885

Jane Geddes Engineering Corporation purchased conveyor equipment with a list price of $10,000. The vendors credit terms were 2/10, n/30. Presented below are two independent cases related to equipment. Assume that the purchases of equipment are recorded gross.

a.) Geddes paid cash for the equipment 8 days after the purchase.
b.) Geddes traded in equipment with a book value of $2,000 (initial cost $8,000) and paid $9,500 in case one month after the purchase. The old equipment could have been sold for $400 at the date of trade. Assume the exchange has commercial substance.

Instructions: Prepare the general journal entries required to record the acquisition and payment in cash of the independent cases above. Round to the nearest dollar.

Reference no: EM13600885

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